Strategic Decisions and Sustainability Choices by Olimpia Meglio & Kathleen Park

Author:Olimpia Meglio & Kathleen Park
Language: eng
Format: epub
ISBN: 9783030054786
Publisher: Springer International Publishing

5.3 Research Methods for the Investigation of Relationships

Acquisitions as multi-stakeholder deals emphasize the importance of relationships among actors. This view emphasizes that companies do not respond to single stakeholders, rather to the interaction of multiple influences from the entire stakeholder network (Rowley, 1997). If the research focus (the unit of analysis) is on such relationships, social network analysis represents a suitable research tool study of acquisitions from a relational, network-based perspective (Borgatti, Everett, & Johnson, 2013).

The primary goal of social network analysis is to study the properties of these relationships and of the social structure they build (Mirc, 2015). Specifically, Rowley (1997) suggests that density of the network and the centrality of the focal company are relevant to understand the variety of responses to different stakeholders’ pressures. Network data can be collected from either primary or secondary sources through different data-gathering techniques, such as questionnaires, interviews, observation, or archival records.

Mirc (2015) provides an overview of acquisition research adopting social network analysis, which she categorizes as research about interpersonal networks, inter-unit networks, and inter-organizational networks. For instance, scholars have investigated how the relationship with one or more investment banks influence the quality of information gathered and eventually acquisition performance (Sleptsov, Anand, & Vasudeva, 2013). Or queried how commonalities between executives’ social networks from the acquiring and the target firm influence the reaction to a tender offer (D’Aveni & Kesner, 1993). These studies display how interpersonal relationships within or outside the acquiring company’s boundaries may actually influence whether the deal takes place and how.

Social network approach has also been applied to inquire the effects of M&As on the business environment, either the industry structure or the direct and indirect relationships that the acquiring and acquired firms, or merged firms, hold with their environment. Spedale, Van den Bosch, and Volberda (2007) study factors that affect the target firm’s network after an acquisition and find that acquirers’ attempts to build close relationships with the target result in the dissolution or deterioration of strong ties that the target has maintained with external market actors before the acquisition. These findings question the ability of acquiring companies to exploit the business relationships of the target company and the benefits that the acquiring company is able to reap from the deal.

Relationships with customers have been the main focus of Lusch, Brown, and O’Brien (2011), while Anderson, Havila, and Salmi (2001) are concerned with both customers and suppliers and how relationships with them change as a consequence of an acquisition. Öberg (2012) discusses shifts of network pictures, that is, the way in which actors in the firm perceive changes in the firm’s relationships after the deal. They show how pre-acquisition networks might radically change due to the acquisition, thus challenging managers to drastically change their perceived network picture in time.

Social network analysis has also been employed to investigate the dynamics of internal relationships between employees from both the acquiring and target companies (see Mirc, 2015), offering complementary perspectives to studies about employees’ reactions. In our view, social network analysis

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